Recently I had trouble on a Windows 7 Ultimate Machine with Expression Encoder 4 installed with a "File type isn't supported" error being returned when programming against the SDK. Upon creating an instance of the MediaItem object, the exception was thrown. It turns out even with Win7 ultimate, EE4, and Windows Media Player 11 installed I was still missing some codecs. I downloaded a robust codec pack from the link below and it solved the issues. Microsoft also offers a codec package for older versions of Windows Media Player, but to make sure I had no more issues I installed the larger free package offered from CNet. Once the additional codecs were installed, the code continued to work perfectly. Remember as well, if this code is in a service or .dll, make sure those codecs are in place on machine or server where deployed as well, to prevent the "Well it works on my machine, but not the server..." kind of issue.
Media Player Codec Pack
Codec Installation Package for Windows Media Player 7.1 and later